GM solicits Washington’s support for bailout: report

GM solicits Washington’s support for bailout: report
PTI
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First Published: Mon, Nov 17 2008. 10 12 AM IST
Updated: Mon, Nov 17 2008. 10 12 AM IST
New York: Car maker General Motors has been telling officials in Washington that a bankruptcy filing by the company maker would unleash unintended consequences that could cripple the country’s industrial base, a media report says.
“General Motors Corp, hoping to sway the battle in Washington over an auto-industry bailout, has begun telling federal officials that a bankruptcy filing by the car maker would set off a chain reaction hammering hundreds of suppliers and dealers - and in turn the company’s Detroit rivals,” the Wall Street Journal reported on Monday.
Quoting people familiar with the situation, WSJ said “GM is holding meetings this weekend with US Congressional leaders, the Bush White House and members of the Obama transition team.”
Some of the GM board members including Erskine Bowles, Phil Laskawy, John Bryant, Armando Codina are pitching in on the lobbying effort, WSJ said.
“Part of GM’s premise is that a bankruptcy would threaten both jobs and the health of the government’s pension-benefit insurance arm, which covers millions of workers not in the auto industry,” the newspaper said.
Auto-related industries employ 3.1 million people around the country, encompassing everything from car-seat makers to auto dealers to auto-parts stores. GM itself employs 1,23,000 in North America and does business with thousands of North America suppliers.
Meanwhile, another person close to GM has told the WSJ that executives recently told GM’s board they are “increasingly optimistic” that GM will receive a liquidity injection before the end of the month.
To muster up support for the bailout, GM has also been sending letters to tens of thousands of dealers, supplier executives, employees and union members, the daily said.
Leading car makers like General Motors Corp, Ford Motor Co and Chrysler LLC are seeking an emergency infusion of cash, in order to survive the global financial turmoil.
On Friday, Senate Majority Leader Harry Reid has signalled that he would move forward tomorrow with a bill giving the industry access to the $700 billion Troubled Asset Relief Program (TARP), the daily added.
TARP was set up by the government in October to help ailing banks and other financial firms.
However, the Bush administration and many Senate Republicans oppose giving auto makers access to TARP. Instead, last Friday President Bush had urged Congress to speed up the release of $ 25 billion in already-approved loans to the auto industry, the report added.
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First Published: Mon, Nov 17 2008. 10 12 AM IST
More Topics: General Motors | Bailout | US | Economy | Ford |